Bloomberry earmarks P20B for Solaire expansion
Bloomberry Resorts Corp., the first licensee to open a gaming complex in the Entertainment City of Philippine Amusement and Gaming Corp., is spending P20.5 billion to expand Solaire Resort and Casino with the goal of opening the additional facilities to the public next year.
“As of May this year, construction is 40-percent complete,” Bloomberry chair and president Enrique Razon told stockholders during their annual meeting Monday. “Topping off the last floor is expected in December this year and we hope to inaugurate Phase 1-A in the third quarter of 2014,” Razon said.
Upon completion, Solaire’s Phase 1-A expansion will provide an additional 200 slot machines, 65 gaming tables, a new 300-room all-suite boutique hotel tower, additional restaurants, a retail promenade with more than 20,000 square meters of leasable space, a performance theater with up to 1,800 seats, a nightclub and a parking facility with space for about 3,500 cars.
Asked about the current tax issue hounding the gaming industry after the company’s stockholders’ meeting, Razon told reporters that Bloomberry had provisions in its existing license that would sufficiently cover such uncertainties. “We think we’re very much protected… we are somewhat optimistic,” he said.
Gaming licensees like Bloomberry have been working under the assumption that the Bureau of Internal Revenue would not reconsider its position but the issue could be resolved at the “executive” level, he said. The licensees have been working with the state-owned Pagcor on this issue.
“It will be resolved, I think, before the end of the year,” Razon said.
The uncertainty stems from the loss of Pagcor’s tax-exempt status under its charter as affirmed by a Supreme Court ruling in 2011. This, in turn, triggers a shift in the tax regime for gaming licensees from the 5-percent franchise tax on gross gaming revenues to a 30-percent tax on net income, which is seen affecting the bankability of the industry especially as investors had come in on the assumption of a competitive cost structure versus regional gaming hubs.
Asked whether he was happy with the arrivals and revenues so far, Razon said foot traffic at Solaire was “ramping up quite nicely.”
Foot traffic is estimated at 15,000-16,000 daily on a typical weekend. The most popular sections are those featuring slot machines near the parking place while the restaurants are also attracting patrons, even non-gamers, Razon said.
Visits at Solaire mostly start at 5 p.m. and peak at around midnight, he said. The foreign market, mainly Asia-based, accounts for a “quite large” portion of the revenues.
“As Solaire enters into its second quarter of commercial operation, plans are in the works to ramp up activities in all sectors. Solaire is thick into the process of further building up its gaming business. A number of junket operators have signed up to bring in foreign VIP players,” Razon said.
Last March, Bloomberry tapped a P14.3-billion syndicated loan facility from Banco de Oro Unibank, China Banking Corp. and Philippine National Bank to fund the Phase 1-A expansion. Razon said Bloomberry had no more funding requirements but it was reserving the option to sell debt paper again but only to refinance existing liabilities and pare down debt financing cost.